Cuba Faces the Consequences of Meager Salaries
by Aurelio Pedroso (Progreso Semanal)
HAVANA TIMES — In spite of some efforts to increase laborers’ and professional’s wages, the controversial issue with salaries based on the state budget still continues to be an unbearable headache for Cuban authorities, as an increase in these depends on greater productivity.
There isn’t anything more similar to this situation than the famous what came first scenario, the chicken or the egg? If we keep our feet on the ground, we’ll see that progress won’t be made without any incentives.
You don’t have to be an economist to realize what problems this entails. What’s more, anyone who was kicked out of the Economy department in the first semester of their degree because of poor grades can understand that things are only getting worse and that it’s time to find a solution.
The situation with our doctors and paramedics is something close to my heart because all of our health, lives and deaths depend on it. After long hard and expensive years of training, quite a few of them have left the Island and many others, as a recent and real phenomenon, have chosen to hang up their white coats and go to work in private restaurants not to mention those with nice homes who make what they would in a month at a hospital in three days of renting a room out.
Not too long ago, I had to get a wisdom tooth taken out and it came as a surprise when a renowned dentist, with foreign students in his office, said “all of this for 20 Cuban pesos (around 1 USD) per day.”
I don’t know what police experts think when they analyze the motives behind people committing crimes, but I would dare to say that among the top few reasons are the insufficient incomes people receive at their jobs, as well as the absence of moral values which we should have learned in our cribs.
It isn’t the first time or the last that I mention the case of the priest at our parish church. Maybe he has a handwritten letter from the Pope, to pardon sins and give a few prayers to those who in the calm and trust that a confessional gives them, tell him that they have stolen a couple of chickens from their workplace. “Son, be careful with that, if you get caught things will be much worse.” Warnings and not punishment for failing to abide by one of the ten Catholic commandments.
I don’t know the exact figure of how many university-educated professionals are working in jobs that they didn’t study, maybe the Office for National Statistics and Information (ONEI) has it.
This Office has revealed the average salary in Cuba in detail. When this became public, international media divided things by 24 and told people about the poverty people earned in dollars. I don’t agree with these numbers. I have always thought that they don’t accurately illustrate the problem because they don’t take into account health and education bills, among others, which are free as well as water and gas bills which are heavily subsidized by the State.
A reliable friend who works as an engineer at a foreign company gave me the lid on this can of worms, if this is the correct phrase for such a serious issue. It turns out that another new company is looking for engineers and they are offering a car, 300 CUC in bonuses (unreported), a mobile phone and other benefits. And they couldn’t find any. They saw some recommended engineers and they have their own businesses. Quite clearly, an obvious and juicy proposal such as this one doesn’t interest them.
There are more than enough anecdotes and I don’t need to keep on telling them because any Cuban has their own collection of these.
A lot of corruption, too much corruption and double standards are creating different dimensions to this problem with mainly economic roots and not political ones. But, beware. Don’t go down the political road because finding a solution to this problem will be even harder. Even harder than finding the famous needle in the haystack. Keeping your head under your wing, like the ostrich does, would be a lethal mistake in a new kind of socialist project which needs tack and daring at the same time.
Translation by Havana Times
Aurelio Pedrosa’s article raises a long term problem. He writes of “a foreign company” offering conditions of employement that the Cuban Government would not accept, suggesting that the ‘offer’ included a car, 300 CUC in unreported bonuses, a mobile ‘phone and un-named “other benefits”. Such payments in Cuba are regarded as “corruption” with imprisonment, heavy fines and confiscation of assets a consequence.
I have previously referred to two Canadian business owners who were so treated, but another example was the Coral Capital Group which under CEO Amando Fakhre invested $175 million in the hotel Saratoga in Havana. Fahkre and the CEO of the Saratoga Stephen Purvis, were both arrested and jailed for “corruption. Both being British citizens.
Purvis said: “We are somewhat in the dark here. If I pay my manager an extra $100 a month as I feel I should, is that a crime against national security?”
The answer in Cuba as he found out when jailed, was yes!
Aurelio Pedrosa is correct in referring to foreign companies doing business in Cuba being: “a can of worms”.
Article 18 of the Constitution of Cuba states:
“The State directs and controls foreign commerce.”
Article 21 is:
“The law establishes the amount of owners assets that are seizable.”
These parts of the Constitution are practiced!
The “new man” socialist model every one works without need of financial incentive was the thinking of a child’s mind. Nothing is free in this world. Government regulation can shape incentives and redistribute gains from from work and capital investment. But what does not work is the low or no salary model of early socialist models. What also does not work very well are centralized micro decision making. It leads to corruption and ineficient allocation of effort and capital worse than systems with market forces driving allocation of productive resources. The wack socialist model or uncontrolled capitalist model is a false choice peddled by soft minds or authoritarian elites. Of course a market system with taxes can support social programs. It is the model that works. Salaries and taxes need to go up in Cuba.